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Consumer durables, also known as durable goods, are products that last for three years or more. They include mobile homes, large and small appliances, furniture and furnishings, carpets and rugs, automobiles, rubber tires, lead-acid automotive batteries, boats, consumer electronics, luggage, sporting goods, household goods, and fine jewelry."}},"@type": "Question","name": "What is the difference between a durable good and a nondurable good?","acceptedAnswer": "@type": "Answer","text": "The principal difference is that while a durable good lasts for three years or longer, a nondurable good is used up in fewer than three years. In addition, durable goods hold their economic value for much longer than nondurable goods.","@type": "Question","name": "Why are durable goods important?","acceptedAnswer": "@type": "Answer","text": "The purchase of consumer durables is considered an economic growth engine. Sales of durable goods accounted for more than 68.4% of U.S. gross domestic product (GDP) in the second quarter (Q2) of 2022. As of July 2022, that amounted to almost $2.17 trillion in spending."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsWhat Are Consumer Durables?Understanding Consumer DurablesTypes of Consumer DurablesConsumer Durables vs. Nondurable GoodsCategories of ConsumptionExamples of Consumer Durable Goods CompaniesWhat are some examples of consumer durables?What is the difference between a durable good and a nondurable good?Why are durable goods important?The Bottom LineEconomicsMacroeconomicsConsumer Durables: What Part of Retail Sales Are They?ByWill Kenton Full Bio LinkedIn Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU.Learn about our editorial policiesUpdated September 01, 2022Reviewed byRobert C. Kelly Reviewed byRobert C. KellyFull BioRobert Kelly is managing director of XTS Energy LLC, and has more than three decades of experience as a business executive. He is a professor of economics and has raised more than $4.5 billion in investment capital.Learn about our Financial Review BoardFact checked byKirsten Rohrs Schmitt What Are Consumer Durables? Consumer durables, also known as durable goods, are a category of consumer goods that do not wear out quickly and therefore do not have to be purchased frequently. They are a part of core retail sales data and considered durable because they last for at least three years, as defined by the U.S. Department of Commerce. Examples include large and small appliances, consumer electronics, and furniture and furnishings.
durables
Consumer durables, also known as durable goods, are products that last for three years or more. They include mobile homes, large and small appliances, furniture and furnishings, carpets and rugs, automobiles, rubber tires, lead-acid automotive batteries, boats, consumer electronics, luggage, sporting goods, household goods, and fine jewelry.
The purchase of consumer durables is considered an economic growth engine. Sales of durable goods accounted for more than 68.4% of U.S. gross domestic product (GDP) in the second quarter (Q2) of 2022. As of July 2022, that amounted to almost $2.17 trillion in spending.
Durable goods are known to form an imperative part of economic production. This can be exemplified from the fact that personal expenditures on durables exceeded the total value of $800 billion in 2000. In the year 2000 itself, durable goods production composed of approximately 60 percent of aggregate production within the manufacturing sector in the United States.[2]
ABSTRACT - Preliminary results of a two-wave longitudinal study of durable goods purchase plans and fulfillment supported the value of further investigating four acquisition categories for major durables, including Maintenance Replacement, Adjusting/Upgrading Replacement, Additional Unit Expansion, and First Acquisition Expansion. These categories were more useful than the distinction between "planned" and "unplanned" measures in explaining variations in search, satisfaction and payment method variables.
In this paper we investigate whether a standard life-cycle model in which households purchase nondurable consumption and consumer durables and face idiosyncratic income and mortality risk as well as endogenous borrowing constraints can account for two key patterns of consumption and asset holdings over the life cycle. First, consumption expenditures on both durable and nondurable goods are hump-shaped. Second, young households keep very few liquid assets and hold most of their wealth in consumer durables. In our model durables play a dual role: they both provide consumption services and act as collateral for loans. A plausibly parameterized version of the model predicts that the interaction of consumer durables and endogenous borrowing constraints induces durables accumulation early in life and higher consumption of nondurables and accumulation of financial assets later in the life cycle, of an order of magnitude consistent with observed data.
Durable goods are tangible commodities that will last more than a year with normal usage. Durable goods comprise two categories: consumer and producer durables. Examples of consumer durables are cars, boats, furniture, televisions, appliances, and fine jewelry. Producer or capital durables include machinery and equipment.
The role of durable goods in the business cycle, the ups and downs of business activity in the United States, are extremely important. The output of durable goods shows greater variability over the business cycle than output of other goods. An automobile is a "big ticket" item and lasts a number of years. Since it is a long lasting good, its purchase can usually be postponed for long periods. The purchase is usually with borrowed money involving the payment of interest. In a recession, usually accompanied by high interest rates, purchases of durables will fall dramatically. In contrast during a time of expansion with low interest rates, durables are in high demand. On the other hand, the purchase of non-durables, like bread, milk, and beer, will change minimally over the business cycle.
Key statistics, or indicators, are used to analyze and forecast changes in the business cycle. The Gross Domestic Product (GDP) is the market value of all final goods and services produced within a certain time period. A key component of the GDP is personal consumption expenditures, which include durable goods expenditures. Durable goods alone accounted for approximately 8 percent of the GDP in the 1990s. Increased spending for durables contributes to a positive economic forecast whereas a decrease points to an economic slowdown.
Because they are only bought every several years, consumption patterns tend to be more volatile. For example, in a recession, there will be a bigger fall in demand for consumer durables because people delay the purchase until the economy recovers. When the economy recovers there is often an upsurge in buying because people take the opportunity to buy after waiting an extra few years. 041b061a72